Oil and gas giant BP is selling its global petrochemicals business, including a Charleston-area plant along the Cooper River, for $5 billion as part of a plan to shift its business to renewable sources of energy.
The London-based company said in a statement Monday that the overlap of the chemicals unit with the rest of the company is "limited" and that it takes "considerable capital" to grow these businesses.
"Today’s agreement is another deliberate step in building a BP that can compete and succeed through the energy transition,” CEO Bernard Looney said in a written statement Monday.
The company struck the deal with Ineos, which also is based in London. The global chemicals company has more than 180 sites in 26 countries with 22,000 employees.
Petrochemicals are derived from oil and gas and are used to make industrial products such as plastics and paints.
BP’s waterfront plant near Huger in Berkeley County makes purified terephthalic acid, or PTA. It's the primary raw ingredient in polyester clothing, plastic bottles food packaging, carpets, electrical insulation and other products.
The site employs about 350 workers and contractors.
"Employees of our petrochemicals business, including those at Cooper River, are expected to transfer to Ineos on completion (of the sale)," said BP spokeswoman Megan Baldino. "BP will continue to operate the business until closing and will work with Ineos during the coming months to ensure a safe and seamless transition."
The transaction with Ineos is expected to be complete by the end of 2020.
BP in 2017 completed a $200 million upgrade to its 40-year-old petrochemical plant off Cainhoy Road. The upgrade allowed the company make PTA with less energy and fewer carbon emissions. The improvements increased the plant's capacity to 1.4 million metric tons of PTA a year.
The Cooper River plant takes up about 450 acres of BP’s roughly 6,000-acre site. Most of BP’s land is preserved as forest and wetlands, along with recreation facilities for employees.
According to BP, the Cooper River facility has more than $100 million in annual economic impact through payroll and third-party expenditures. The facility also pays roughly $2 million a year in school and Berkeley County property taxes.
The coronavirus pandemic has rocked the energy sector, driving oil demand and prices lower. BP’s first-quarter earnings tumbled 66 percent while its debt levels, among the highest in the sector, grew, according to the Financial Times newspaper.
The crash has emboldened Looney, who took over as CEO in February, to speed up a plan to reinvent the company by overhauling its structure and assets in a bid to turn the group into a net-zero emissions company as the world shifts to greener energy, the newspaper reported.